Saudi Arabia has big plans for Renewable Energy with a target of 9.5GW by 2023. The government intends to invest between $30 billion and $50 billion across 60 projects, with 1 GW of capacity earmarked for Concentrated Solar Power (CSP), according to the Renewable Energy Project Development Office (REPDO), established in February 2017 to implement the country’s National Renewable Energy Program (NREP).
Saudi Arabia aims to exceed its target to generate 9.5 gigawatts of electricity from renewable energy, to highlight its long-term commitment to green energy and to give investors a sense of comfort that the Kingdom has a long-term vision for renewable energy.
The effort could replace the equivalent of 80,000 barrels of oil a day now burned for power. And improving the country’s energy efficiency by just 4 percent a year could save the equivalent of 1 million barrels a day of crude by 2030, according to Saudi Energy Experts.
The effort goes hand-in-hand with a drive by the royal family to broaden the economy following two years of budget deficits tied to low oil prices. More industry, though, means more energy, with the amount of power used at peak times growing by 10 percent in the last year alone.
Saudi Aramco will bring online the similar-sized Fadhili gas project in the country’s east by the end of the decade. That gas project and the renewable projects planned for completion by 2023 could save about 300,000 barrels of oil from being burnt for power, according to estimates based on IEA and OPEC data.
Alternative energies are “a key factor in the economic transformation,’’ Fabio Scacciavillani, chief economist of the Oman Investment Fund, said in an interview. “This region has a great competitive advantage in low-cost energy production and that will continue with renewables. That will create a big advantage particularly in energy intensive industries.’’
Saudi Arabia plans to sell 5 percent of Saudi Aramco stocks in 2018. And earlier this year, Saudi Arabia and China agreed to invest $ 65 billion in joint investments in energy and infrastructure over the next years.
Forecasted Scenarios
Optimistic
New Energy Update anticipates the Saudi Arabian market to achieve an upper level of 273 MW installed capacity by 2022 under the optimistic scenario, a 100 percent realization of the current project pipeline.
This scenario assumes that the market’s first CSP capacity will come online by the close of 2017 with the Duba 1 hitting its EOD and Waad Al Shamal achieving operational status in 2019.
The forecast assumes that any CSP capacity under the NREP will connect to the grid post-2022.
Conservative
Under the conservative forecast we should see 93 MW of installed capacity by 2022, with growth for the period stalling from 2020 following the commissioning of Waad Al Shamal.
Taiba will fail to connect to the grid during the forecast period, meaning that only 52 percent of thecurrent pipeline will be realized.
Pessimistic
New Energy Update forecasts that the pessimistic scenario will reach the same upper growth level as that under the conservative scenario – 93 MW – but will reach it a year later in 2021 when Waad Al Shamal will come online.
As per the conservative scenario Taiba will not become operational within the forecast window.
